The bunker price, although some $30 to $40/t down since the previous week, is still very much a factor when it comes to calculating whether to book a cargo or not. That so many ships simply sat idle is perhaps testament to the fact that unless a certain freight is achieved, it actually costs the owner less to keep the ship idle than to take a cargo where they will be guaranteed a substantial loss.

Indeed, on the Gulf-to-Far East route owners have been reassessing the rates they have been willing to accept until now. Levels for 5,000 ton cargoes from Houston to principal Far East ports had dropped into the mid-to-high $40s/t. This is for a voyage that can last 30 to 40 days, not counting the time spent in port.

A typical tanker on this route burns some $25,000 a day in fuel/heating costs alone. Putting things into perspective, a rate of $47 to $48/t would get your cargo nearly, but not quite, across the Atlantic to Rotterdam, or two thirds of the way down to Santos, or perhaps into some of the more exotic Caribbean locations, or even through Panama as far as the west coast of Central America.

We see owners now seeking freights in the mid $60s/t for 5,000 ton cargoes from Houston to the Far East, and since a couple of owners have scrapped their July sailings, citing insufficient contractual cargo, there is a chance that these numbers will stick.

Elsewhere, U.S. Gulf-to-Caribbean is not very exciting, but rates are stable. Gulf-to-east coast of South America is stable to firm, and rather surprisingly we are hearing of ethanol fixtures from the U.S. to Brazil, as well as from Brazil to the U.S. Owners must relish these kinds of situations.

Transatlantic rates have slipped further, the sheer numbers of ships on berth with part-space causing freights for 5,000 ton cargos from Houston to Rotterdam to dip into the very low $50s/t.

Europe
While we cannot say that European coastal business is booming, there have been occasions over the past week where surprisingly high freights were fixed for short trips. The other side of the coin is that there have also been fixtures done, more or less at the same time and for similar types of cargoes, where the freight has been less than last-done. The latter tends to be less frequent than the instances of higher freights, suggesting that owners bullish attitude has been working to some extent.

All the same, we feel that the area has benefitted from a number of ships that are fully employed or that have been booked away to other areas. Moreover, in the Mediterranean for example, there seems to be a combination of chemical, vegetable oil and clean petroleum cargoes that have come together simultaneously. It only takes one of these sides to the triangle to falter, and the whole lot caves in.

The deep-sea market out of Europe has been quiet mostly, but freight rates have not decreased. If anything, rates from Europe to Asia have stiffened slightly. Space among the scheduled carriers is not that great, and owners are asking for slightly higher numbers that would push 5,000 ton cargoes from Rotterdam to principal Far East ports up to perhaps low-to-mid $70s/t.

There is a pack of about seven or eight ships that do not normally trade out as far as Asia yet whose owners have been tempted to look at this route, whether for Baltic or Mediterranean loading, or higher-paying phenol/acetone combinations. If sufficient numbers of these outsiders do come on berth, then the flimsy demand we see at the moment will inevitably result in them having to accept reduced freights again.

Transatlantic westbound is another route where demand is unexciting, and the prospects of placing a ship into exactly the wrong area have lead to owners shying away from this route. Consequently, freights for 5,000 ton cargoes from Rotterdam to Houston continue to hover around $40/t.

Asia
There has been a slow but steady increase in the amount of business being conducted in the domestic Asian market. Volumes are however still far below what has been customary, and so freight levels remain flat. From Ulsan to Taiwan, 3,000 ton parcels are going for a touch either side of $20/t, and the same cargo down to Singapore fetches around $32 to $34/t.

Export business however has been very firm, in particular acetic acid to Europe following a recent force majeure announcement in the U.K. Several large cargoes, all over 10,000 tons of acetic acid, have been fixed to the Mediterranean and Northwest Europe for freights between $100 and $120/t, depending upon load and discharge ports.

Biodiesel demand is strong too, and cargoes of 15,000 to 20,000 tons of renewable diesel from Singapore to Antwerp-Rotterdam-Amsterdam are becoming more frequent. Sulphuric acid exports to the Americas have not finished either, and there are usually several requirements in the market at any one time.

A new trade that seems to have sprung up is the shipment of paraxylene from Asia to the U.S., and traders continue to toy with the possibility to ship benzene to the States. Palm oil rates have suddenly shot up as a consequence, with 20,000 ton cargoes from the Malacca Straits to the Mediterranean occasionally hitting $80/t, and even 35,000 ton shipments from Singapore to Rotterdam have been known to have paid $60 to $65/t.

Even cargoes into the east coast of India have been recording levels in the upper $20s/t, and the west coast of India has seen numbers from the low to mid $30s/t, even for cargoes of 12,000 to 16,000 tons in size.

India and the Middle East Gulf market is still pretty lively. Westboundsees cargoes of MTBE, benzene, acetic acid and sulphuric acid. Space is tight, and 2,000 to 3,000 ton parcels from India to the eastern Mediterranean are paying around $110 to $120/t. Eastbound sees even more large slugs of methanol, aromatics, glycols and styrene. There are at least ships with space in the region able to load over the next week or two, but the amount of business quoted means most of them are keeping their offers at high levels.

Adrian Brown is senior market analyst for chemicals and base oils with SSY Shipbrokers, London. Information about SSY can be found at www.ssyonline.com. Adrian Brown, in the U.K., can be reached at fix@ssychems.com or by phone at +44 1207-507507. In the London office SSYs Jordi Maymi can be reached at fix@ssychems.com or +44 20 7977 7560.